Years ago, I found myself sitting in law school in Moot Court wearing an oversized itchy blue suit. It was a horrible experience. In a desperate attempt to avoid anything like that in the future I enrolled in a tax course. I loved it. I signed up for another. Before I knew it, in addition to my JD, I had a LL.M Taxation. I needed only to don my cape…. taxgirl® was born. Today, I live and work in Philadelphia, PA, one of the best cities in the world (I can't even complain about the sports teams these days). I landed in the City of Brotherly Love by way of Temple University School of Law. While at law school, I interned at the estates attorney division of the IRS. At IRS, I participated in the review and audit of federal estate tax returns. I even took the lead on a successful audit. At audit, opposing counsel read my report, looked at his file and said, “Gentlemen, she’s exactly right.” I nearly fainted. It was a short jump from there to practicing, teaching, writing and breathing tax.

Shoppers pay for their purchases at the cash register during the Grand Opening of the new Walmart Neighborhood Market in Panorama City, California. (Image credit: AFP/Getty Images via @daylife)

You couldn’t pay me to brave the crowds at the stores today. Black Friday – in person – isn’t my thing. And despite the wheedling and cajoling of my friends who insist that it’s fun to be jostled about and elbowed at the register in search of discount toys, I’ve resisted the lure of the malls and the outlets every year.

I have, however, been convinced in recent years to shop online after Thanksgiving. Like many of you, I’ll be firing up my computer, looking over my shoulder and searching for bargains on Cyber Monday. Cyber Monday, the Monday after Thanksgiving, was created in 2005 as a retail alternative to Black Friday. The idea is that many folks, stuffed with turkey and dreaming of the holidays, will be back to work on Monday with cash in their pockets and shopping on their minds. And it’s working. Last year, consumers spent more than a $1.25 billion on Cyber Monday, making it the biggest day for online shopping in history (up 22% from last year). And according to comScore, whose business it is to measure digital activity, more than half of that spending (50.2%) took place on work computers.

Will those trends continue? It will be interesting to watch this year. The economy is still flat so most folks will be bargain-hunting. To be honest, I didn’t see a lot of deals in my inbox that have perked my interest so far (a coupon from Minted.com notwithstanding because I’m a paper junkie).

One thing that will be new to many: online sales tax. While many companies have been charging sales tax at the electronic till, others have resisted, claiming that there’s no reason to do so. Several states have taken issue with that mindset and have aggressively been collecting sales and use taxes from consumers and retailers. Results have been mixed. But one big score: Amazon.com. After years of back and forth, Amazon.com now imposes sales tax in the following states: California, Kansas, Kentucky, New York, North Dakota, Pennsylvania, Texas and Washington. Sales made through Amazon.com from other sellers may also be subject to sales tax (you can check their site for details).

Other online retailers may also be charging sales tax this year. The internet doesn’t change the rules: companies which make sales online are still subject to the same sales tax collection requirements as so-called “brick and mortar” stores. Generally, the test is whether the company has a physical presence in that state (though physical presence is a bit subjective, depending on who is asking, hence the legal battles over this issue). If a company has a physical presence in a state, they are required to collect and remit sales taxes.

Even if a company doesn’t charge you sales tax, that doesn’t necessarily mean that get a pass. Many states impose a “use tax” which is the consumer’s version of the sales tax. If your state has a use tax and you are not charged a sales tax, you are supposed to self-report and pay the tax. Almost half of the states offer a line on their income tax returns now for this purpose; otherwise, there are separate tax forms for your completion. As you can imagine, between the complexity and the insanity of this rule, most consumers ignore it (*clears throat awkwardly*). But it’s out there. Just saying.

The aggressive imposition of sales tax on online transactions is supposed to make life more fair for those “brick and mortar” retailers – shops that you actually travel to in order to make a purchase. The argument has always been that taxpayers shop online because not paying sales tax makes items cheaper. I tend to believe that’s not true. I think people shop online for convenience, not for tax avoidance. As that gap between those retailers subject to tax narrows, it will be interesting to see what shakes out.

In the meantime, let’s hope the registers continue to jingle this year – both in stores and online. It’s good for our economy (so long as consumers are reasonable and don’t overspend).

So what about you? Braving the crowds today? Hoping to score deals on Monday? Or ditching it altogether?

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“No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing it’s inspection laws: and the net produce of all duties and imposts, laid by any state on imports or exports, shall be for the use of the treasury of the United States; and all such laws shall be subject to the revision and control of the Congress.”

It was my understanding that sales tax on items purchased out of state and shipped to a consumer constituted a duty or impost, and were thus unconstitutional? At least that’s the argument I would make. Am I wrong?

Charlie, that clause bars states from charging taxes and levies on imported goods from other nations. The idea is that it is in the purview of the federal government. That’s why it’s lumped together with the treaties/military clauses at Section 10.

While more shoppers will see sales tax charged on their internet purchases this year than in years past – my opinion is that sales tax isn’t going to have a huge impact on motivating people to shop on Black Friday as opposed to Cyber Monday. As you point out, purchases made over the internet are not “tax-free”. Unless a purchaser is a resident of one of the five states that do not impose a state sales tax – Alaska, Delaware, Montana, New Hampshire, or Oregon – that purchaser is required to report and pay use tax on their “tax-free” purchases.

As you know, I follow and report on the states efforts to require out-of-state retailers to collect and remit sales tax and the federal proposals currently under consideration by the 112th Congress. As a result I read just about anything I can get my hands on. Some of the surveys that I’ve seen support that folks in general will not stop shopping on-line simply because sales tax is added to their bill. People who shop on-line do so for a variety of reasons – selection, the ability to read product reviews and compare one e-tailer’s price against another with just a few clicks, and the convenience of being able to shop where and when they want.

I do sympathize with the “real” main-street merchants (the family owned businesses, not the “big-box” chains) and understand their frustration at customers who simply visit their stores to view products and ask questions. However, my opinion is that requiring more and more internet sales to be subject to sales tax will not cause customers to come running back to brick-and-mortar stores – at least not in huge numbers. Cyber shopping is here to stay and sales tax won’t change that.